RNA polymerase II (Pol II) elongation control has emerged as a critical control point for metazoan gene expression. Promoter proximal pausing occurs at most human promoters and maintains an open promoter configuration, allowing rapid response to regulatory signals. Pausing is a complex process controlled by negative elongation factors that include DSIF, NELF, Gdown1, and GNAF and by the first nucleosome encountered. Overcoming block to elongation and subsequent mRNA production requires the kinase activity of P-TEFb. Although many of the negative factors have been identified, mechanisms orchestrating the synchronized exchange of factors required for the transition from initiation, through pausing, and into productive elongation have yet to be elucidated. Our preliminary experiments using a novel inhibitor of the essential cyclin-dependent kinase Cdk7 have revealed critical, unanticipated roles for Cdk7 kinase activity in early events in Pol II elongation in vitro. The Cdk7 inhibitor (THZ1) was developed in Nathanael Gray's lab (Harvard) for use as an anti-cancer therapy. Cdk7 kinase activity has long been known to be important for phosphorylation of the C-terminal domain (CTD) of the large subunit of Pol II. We have shown that in addition to inhibiting CTD phosphorylation, THZ1 blocks capping in an unanticipated way, significantly alters the pattern of transcripts resulting from promoter proximal pausing, and almost completely abrogates P-TEFb-dependent productive elongation. Our overall goal is to elucidate the mechanisms driving the ordered, early events controlling the elongation properties of Pol II. We propose to dissect Pol II transcription by determining the steps in early elongation that require Cdk7 activity or are abrogated by THZ1, and to learn how factors compete for Pol II to control its elongation properties. We plan to examine this process by determining how CTD phosphorylation is coupled to capping and how the known pausing factors and the +1 nucleosome collaborate to enable the P-TEFb-dependent transition into productive elongation. This proposal combines the resources of the Luse and Price labs which each have decades of experience with in vitro transcription systems. The synergy of these two groups results from the extensive expertise using factor-rich extract systems (Price Lab) and sophisticated reconstituted in vitro systems (Luse Lab) for the dissection of transcription mechanisms.